The following information applies to the questions displayed below/ Littleton Bo

Question

The following information applies to the questions displayed below/ Littleton Books has the following transactions during May May 2 Purchases books on account from Readers Wholesale for $2,700, terms 2/10, n/30 May 3 Pays cash for freight costs of $140 on books purchased from Readers May 5 Returns books with a cost of $250 to Readers because part of the order is incorrect May 10 Pays the full amount due to Readers May 30 Sells all books purchased on May 2 (ess those returned on May 5) for $3,400 on account 24. Required cions of Lmeton Books, assuming the company uses a perpetual inventory system. (if no entry is n first account field.) Journal entry worksheet Purchases books on account from Readers Wholesale for $2,700, terms 2/10, n/30. Note: Enter debits before credits Type here to search

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit May 2 Merchandise inventory 2700 Account payable 2700 May 3 Merchandise inventory 140 Cash 140 May 5 Account payable 250 Merchandise inventory 250 May 10 Account payable (2700-250) 2450 Cash (2450*98%) 2401 Merchandise inventory 49 May 30 Account receivable 3400    Sales revenue 3400 May 30 Cost of goods sold 2541   Merchandise inventory 2541

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